WEBVTT - China's Crackdown on Tech a Headache for Investors 0:00:01.800 --> 0:00:04.440 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:04.480 --> 0:00:07.320 Bloomberg Quick Takes Tim Stanovk. We're here every day bringing 0:00:07.320 --> 0:00:09.799 you the latest news from the world to business and finance, 0:00:09.840 --> 0:00:13.680 plus technology, politics, economics, all partnising the power of Business 0:00:13.680 --> 0:00:17.160 Week reporters and editors, not to mention our journalists and 0:00:17.160 --> 0:00:20.440 analyst in more than twenty countries. You can download Bloomberg 0:00:20.440 --> 0:00:23.439 Business Week and iTunes, SoundCloud, or Bloomberg dot Com. You 0:00:23.480 --> 0:00:25.439 can also listen to our radio show at two pm 0:00:25.440 --> 0:00:28.400 Eastern Time on Bloomberg Radio or watch us on YouTube 0:00:28.400 --> 0:00:34.360 search Bloomberg Global News. So we mentioned some of the 0:00:34.360 --> 0:00:37.080 COVID headlines, and our news team has certainly been covering them. 0:00:37.640 --> 0:00:41.000 And among the COVID headlines also new coronavirus cases in 0:00:41.040 --> 0:00:43.600 the U s surging to the highest weekly level since 0:00:43.680 --> 0:00:47.560 early February, fueled by that highly transmissible delta variant. Charlie 0:00:47.560 --> 0:00:50.560 was just talking about it, death rows By. That's the 0:00:50.560 --> 0:00:54.880 biggest weekly increase in December. And China is punishing dozens 0:00:54.880 --> 0:00:57.320 of local officials for failing to curb that COVID nineteen 0:00:57.360 --> 0:01:01.880 outbreak in that country, and so the country's former health 0:01:01.960 --> 0:01:04.000 chief they're saying the idea of quote living with the 0:01:04.080 --> 0:01:07.680 virus is unacceptable. We've got a great voice to bring in. 0:01:07.840 --> 0:01:10.039 He is back with us, Dr Jacob B. Kraft. He's 0:01:10.040 --> 0:01:12.480 a biologist. He is CEO and co founder of the 0:01:12.480 --> 0:01:16.720 privately held biopharmaceutical company Strand Therapeutics. He joins us on 0:01:16.760 --> 0:01:20.039 the phone from Boston, Massachusetts. Dr b. Craft, good to 0:01:20.080 --> 0:01:22.679 have you back here on Bloomberg Radio. How are you. 0:01:24.319 --> 0:01:27.160 I'm fantastic, Carol. How are you doing? Doing well? Doing well? 0:01:27.200 --> 0:01:30.679 Trying to manage through and filter through some of the 0:01:30.720 --> 0:01:36.320 headlines the current round of virus headlines cases surging, especially 0:01:36.319 --> 0:01:38.640 for those not vaccinated. What needs to be top of 0:01:38.680 --> 0:01:41.199 mind for our audience and the general public in your view, 0:01:43.160 --> 0:01:46.760 I think two things. One is, domestically, we need to 0:01:46.800 --> 0:01:50.120 make sure that we're getting vaccines out as quickly as 0:01:50.160 --> 0:01:53.760 we as we possibly can. I think see I think now. Finally, 0:01:53.800 --> 0:01:56.920 the BIDO administration is also taking the correct stuff, pressuring 0:01:57.000 --> 0:02:01.040 the FDA to prioritize the you know, the full review 0:02:01.600 --> 0:02:06.120 UH and approval of the COVID vaccine um. And internationally, 0:02:06.200 --> 0:02:09.600 we need to be getting vaccines out to the developing nations. 0:02:09.919 --> 0:02:12.840 The Delta variant was first picked up in India during 0:02:12.880 --> 0:02:18.560 their UH during their major outbreak recently um or months ago, 0:02:19.040 --> 0:02:21.800 and that likely lead to a huge international spread of it, 0:02:21.800 --> 0:02:24.000 which is now threatening you know, kind of the return 0:02:24.080 --> 0:02:26.400 to normal say that we saw right now. The Welcome 0:02:26.400 --> 0:02:29.840 Trust is reporting that one in two people in wealthy 0:02:29.960 --> 0:02:32.880 nations is vaccinated, but only one in seventy four are 0:02:32.960 --> 0:02:36.120 vaccinated in the developing world, and in the developing world, 0:02:36.120 --> 0:02:38.880 where sanitation is often you know, not as as well, 0:02:38.960 --> 0:02:41.679 and people are living in much tighter quarters in a 0:02:41.760 --> 0:02:44.360 lot of these areas, major cities in places like India. 0:02:44.639 --> 0:02:47.800 It further increases our our risk of spread. And so 0:02:47.880 --> 0:02:50.400 it's just unacceptable that we still haven't been able to 0:02:50.440 --> 0:02:54.480 get the vaccines out into these UH developing areas because 0:02:54.639 --> 0:02:58.680 every single day that goes by, we risk vaccine fully 0:02:58.760 --> 0:03:02.320 vaccine sort of resisted virus emerging either here or abroad. 0:03:02.440 --> 0:03:04.280 How tricky do you think it become, especially as people 0:03:04.320 --> 0:03:08.560 start to talk about, including Dr FACCI, about giving out 0:03:08.600 --> 0:03:13.400 boosters already, and how do we balance the developing world 0:03:13.400 --> 0:03:15.919 where some of them haven't even gotten their first vaccine 0:03:15.960 --> 0:03:19.400 individuals there and now we're talking about boosters potentially for 0:03:19.440 --> 0:03:23.800 those in the developed world. Right now, we have a 0:03:23.880 --> 0:03:26.400 bigger problem than than just the boosters. We have a 0:03:26.400 --> 0:03:29.600 problem of not enough people getting vaccinated in the United States, 0:03:29.639 --> 0:03:33.359 with which, honestly, while I respect everyone's right to choose themselves, 0:03:33.520 --> 0:03:35.440 when you live in a society, there is a certain 0:03:35.440 --> 0:03:39.200 amount of of of societal duty and and let's face it, 0:03:39.280 --> 0:03:42.600 patriotism that you should have to protect those Americans around you. 0:03:42.920 --> 0:03:46.560 This outbreak of the new variant is due to uh 0:03:46.600 --> 0:03:50.800 super spreader events happening, mostly driven by the unvaccinated population. 0:03:50.880 --> 0:03:53.520 Of course, now we're seeing them jump into the vaccinated 0:03:53.600 --> 0:03:56.960 population and it's it's it's very sad to see. But meanwhile, 0:03:57.400 --> 0:03:59.400 I think it was the state of Alabama. I saw 0:03:59.440 --> 0:04:03.280 recently how seventy four thousand vaccines expire while they help 0:04:03.320 --> 0:04:06.160 them as people did not take them. And so the 0:04:06.560 --> 0:04:09.200 idea here, and it's been the entire time that we 0:04:09.280 --> 0:04:12.640 have enough vaccines here state side, we should probably be 0:04:12.720 --> 0:04:15.160 doing more to get vaccines out to the developing world 0:04:15.160 --> 0:04:17.919 before they expire as well, um and continuing to just 0:04:18.080 --> 0:04:23.000 incentivize the massive manufacturing of these vaccines. I think that 0:04:23.320 --> 0:04:26.359 at this point, um, it's more of a logistical and 0:04:26.360 --> 0:04:29.239 a prioritization issue of getting vaccines where the most needed 0:04:29.400 --> 0:04:31.840 than it is of just not simply having enough. I mean, 0:04:31.960 --> 0:04:33.839 if you're going to say there's not enough for the 0:04:33.880 --> 0:04:36.719 developing world, but then Alabama's gonna less seventy four thousand 0:04:36.760 --> 0:04:40.600 vaccines expire in a freezer, I think that that's also unacceptable. 0:04:40.800 --> 0:04:43.200 It feels like a crime. Many would argue, what are 0:04:43.320 --> 0:04:46.440 you doing for your own employees. There's increasingly we're seeing 0:04:46.600 --> 0:04:50.760 employee employers another institutions saying if you want to work 0:04:50.760 --> 0:04:54.279 with us, you've got to be vaccinated. UM. You know, 0:04:54.320 --> 0:04:56.560 we we looked at and talked with a lot of 0:04:56.560 --> 0:04:58.880 other executives in the industry about this. I think we're 0:04:58.960 --> 0:05:01.680 very less both as a five set company and as 0:05:01.720 --> 0:05:05.800 a messenger RNA company to have, uh, you know, without 0:05:05.839 --> 0:05:09.680 any prompting from US, a hundred percent vaccine adherents. UM. 0:05:09.760 --> 0:05:12.560 Just you know. I think that people when they are 0:05:13.200 --> 0:05:17.240 educated about the science and understand how how safe and 0:05:17.279 --> 0:05:20.680 effective and impactful these vaccines are. UM, it wasn't something 0:05:20.720 --> 0:05:23.520 that really came up as a as a general issue. UM. 0:05:23.760 --> 0:05:26.880 I think that it's nice actually to see that some 0:05:27.000 --> 0:05:30.760 of the larger players of Southern Military recently UM saying 0:05:30.760 --> 0:05:33.720 that they're going to be starting to mandate the vaccines. 0:05:33.760 --> 0:05:37.120 I mean, I think that a lot of these employers 0:05:37.279 --> 0:05:42.440 should should you really incent to buy their employees to 0:05:42.680 --> 0:05:44.800 get these vaccines, especially people that work at tech and 0:05:44.800 --> 0:05:48.839 biotech companies. It's you know, it's clearly what's going to 0:05:48.839 --> 0:05:52.640 save us from from a vaccine resistant mutation. And while 0:05:52.680 --> 0:05:54.680 I think m R and A is a is an 0:05:54.720 --> 0:05:58.479 absolutely miracle of a of a platform in terms of 0:05:58.520 --> 0:06:02.080 how quickly it could be repurpose. Sefon den Cell and 0:06:02.160 --> 0:06:05.320 Ugo Sawhan from Maderna and Violent Tech of talk at 0:06:05.400 --> 0:06:08.000 length about making new vaccines against the new variants to 0:06:08.000 --> 0:06:11.640 be more effective against new sort of mutations that may arise. 0:06:12.200 --> 0:06:14.360 But sect of the matter is we have an effected 0:06:14.440 --> 0:06:18.600 vaccine that we just need to get into people's arms immediately, 0:06:18.640 --> 0:06:21.240 and it should be on employers. Really, I'd like to 0:06:21.240 --> 0:06:24.920 see the US government really step up and start to 0:06:25.080 --> 0:06:27.400 mandate if if people really want to return to a 0:06:27.480 --> 0:06:30.120 masthless life, we have to have a way to actually 0:06:30.200 --> 0:06:33.080 verify that people have in bad dr B Kraft, we 0:06:33.160 --> 0:06:39.520 talked about the US backing uh waiving patents on COVID vaccines. 0:06:39.720 --> 0:06:42.839 You know, a lot of researchers thought that was terrific 0:06:42.960 --> 0:06:45.080 that they thought that that was a good thing. A 0:06:45.080 --> 0:06:48.279 lot of drug makers didn't think. So what's your perspective 0:06:48.279 --> 0:06:49.760 on this and what does it mean in terms of 0:06:49.800 --> 0:06:53.960 drug development creating new vaccines for the next mutation? Uh 0:06:54.000 --> 0:07:00.600 and so on. I just don't think it's fundamentally helpful. Um. 0:07:00.720 --> 0:07:03.560 And I think I used this analogy before, maybe even 0:07:03.640 --> 0:07:06.720 last time I was on here. But these therapy its 0:07:06.720 --> 0:07:08.880 at so new, they're so cutting edge that a lot 0:07:08.880 --> 0:07:13.080 of the innovation that's there's actually in in the manufacturing tide. 0:07:13.320 --> 0:07:16.200 And so you can waive Madernast patents, but you won't 0:07:16.240 --> 0:07:19.520 be able to access all of their interior secrets to 0:07:19.800 --> 0:07:22.520 how they make those vaccines and and the the the 0:07:22.600 --> 0:07:26.120 actual sort of even reading through the patents that I 0:07:26.160 --> 0:07:28.120 think the best analogy that I that I had come 0:07:28.200 --> 0:07:30.840 up with was, you know, if you had Gordon Ramsay's 0:07:31.600 --> 0:07:34.560 ingredients in front of you and his recipe in front 0:07:34.600 --> 0:07:37.400 of you, could you cook like him? And the answer 0:07:37.480 --> 0:07:39.640 is of course no, right, And that's kind of what 0:07:39.680 --> 0:07:42.600 we're looking at here. It's so I just don't believe 0:07:42.640 --> 0:07:45.720 it's helpful, and I felt like in the Binding administration 0:07:45.840 --> 0:07:49.240 did that, UM, and they washed the hands of this 0:07:49.360 --> 0:07:51.480 vaccine issue and said, well, we've done all the help 0:07:51.520 --> 0:07:54.120 we can and walked away. And we're still sitting with 0:07:54.120 --> 0:07:56.720 one out of seventy four people in developing countries with vaccines. 0:07:56.840 --> 0:07:58.960 And I think that's just an absolute shame. To the 0:07:58.960 --> 0:08:01.080 point is by not just you're saying that even if 0:08:01.080 --> 0:08:02.560 we just opened this up, it doesn't mean all of 0:08:02.600 --> 0:08:05.320 a sudden we'd be able to produce tons and tons 0:08:05.320 --> 0:08:08.440 of vaccines easily and readily, so that we could vacciny 0:08:08.480 --> 0:08:13.120 basically everybody very much more quickly. They waived those patents 0:08:13.160 --> 0:08:15.840 three months ago, four months ago, and please point me 0:08:15.880 --> 0:08:18.720 to the to the example of what country then spun 0:08:18.800 --> 0:08:22.000 up their manufacturing and magically had COVID vaccine is ready 0:08:22.040 --> 0:08:24.960 to go. It was just the the obvious thing, of course, 0:08:25.000 --> 0:08:26.720 would have been to go back to year and start 0:08:26.760 --> 0:08:29.640 investing in the infrastructure of these vaccines and we can 0:08:29.720 --> 0:08:32.640 start making those infrastructure investments. We're seeing people like Anthony 0:08:32.679 --> 0:08:35.760 Faucine now UM, echoing some statements that I've made before, 0:08:35.800 --> 0:08:38.120 which is we need to double down on both manufacturing 0:08:38.160 --> 0:08:41.199 infrastructure of these next generation therapeutics, and we need to 0:08:41.200 --> 0:08:43.839 start thinking about how are we better prepared for pandemics 0:08:43.960 --> 0:08:47.280 in general. But further than that, I think that we 0:08:47.600 --> 0:08:50.560 just need better manufacturing infrastructure. We should have. It's true 0:08:50.600 --> 0:08:53.640 we should have made that that those investments a year 0:08:53.679 --> 0:08:56.280 ago when it looked like the Almannay vaccines were going 0:08:56.320 --> 0:08:58.600 to be a promising way out of this, we didn't 0:08:58.640 --> 0:09:01.400 make those investments. And so now now that I just 0:09:01.440 --> 0:09:04.640 feel like the administration seemed to want to waive the 0:09:04.679 --> 0:09:06.920 patents as if that was going to fix the problem. 0:09:07.000 --> 0:09:09.120 It didn't take the problem, and then here we are, 0:09:09.520 --> 0:09:12.320 um with without the problem being fixed. I'm not worried 0:09:12.320 --> 0:09:15.480 about the patents as a drug company or and I 0:09:15.480 --> 0:09:19.040 don't think Stefan dem cell or talking or worried about 0:09:19.040 --> 0:09:22.760 it either, but it's just fundamentally not helpful. Well, so 0:09:23.840 --> 0:09:26.319 we've gone through a lot, to say, understatement of the 0:09:26.400 --> 0:09:28.960 year of the decade, UH, in terms of the last 0:09:29.080 --> 0:09:31.960 year and a half, are we you know, you understand 0:09:31.960 --> 0:09:34.160 this world. You're on the cutting edge in terms of 0:09:34.440 --> 0:09:38.520 looking at new science and developing UH new methodologies, if 0:09:38.559 --> 0:09:42.080 you will. So have we learned anything in terms of 0:09:42.080 --> 0:09:45.880 being ready for the next pandemic in your view, I 0:09:45.920 --> 0:09:49.839 think that we had the technology right the m R 0:09:49.880 --> 0:09:52.920 and A technology was already being progressed by by the 0:09:53.040 --> 0:09:55.959 n I H by turning actually by all the people 0:09:55.960 --> 0:09:58.920 who are there. What we really needed was public and 0:09:59.360 --> 0:10:03.320 legislative support to invest in these things, to understand that 0:10:03.400 --> 0:10:06.000 these were issues. Right the people at the d D, 0:10:06.120 --> 0:10:09.120 people at DARK, people at the CDC, everyone has been 0:10:09.200 --> 0:10:11.640 screaming about the fact that we are at risk for 0:10:11.679 --> 0:10:14.120 a new pandemic for decades. I've heard it my entire 0:10:14.120 --> 0:10:17.679 professional life, almost to where you stop thinking about it 0:10:17.720 --> 0:10:20.840 even as a professional in the space. And now I 0:10:20.880 --> 0:10:23.760 think where we're sitting at is we have a very 0:10:23.800 --> 0:10:26.640 full public understanding of what a pandemic looks like in 0:10:26.679 --> 0:10:29.440 a modern age that nineteen twenty, but in a day 0:10:29.440 --> 0:10:31.960 where you can you can be in Wuhan, China one day, 0:10:32.160 --> 0:10:34.600 step on a plane, and fourteen hours later be walking 0:10:34.600 --> 0:10:36.559 out in to the middle of New York City, and 0:10:36.840 --> 0:10:39.680 that is a can be a very scary place for 0:10:40.120 --> 0:10:42.720 the propensitive of a pandemic. So I think now we 0:10:42.800 --> 0:10:46.320 have the understanding of the economic and personal toll that 0:10:46.360 --> 0:10:48.920 these sorts of things can take. And I hope I 0:10:48.960 --> 0:10:51.079 really do hope that it means that we can get 0:10:51.120 --> 0:10:54.160 the public and the legislative support to actually make real, 0:10:54.280 --> 0:10:57.839 bold investments into the future of defense. I'm gonna leave 0:10:57.840 --> 0:10:59.400 it on that note. Thank you so much. I always 0:10:59.440 --> 0:11:02.360 appreciate when you join us and find some time for us. 0:11:02.440 --> 0:11:04.880 Dr Jake Becraft he is the co founder and chief 0:11:04.880 --> 0:11:08.400 executive officer of Strength Therapeutics, joining us on the phone 0:11:08.440 --> 0:11:11.040 from Boston. Well online at Bloomberg business Week dot Com. 0:11:11.080 --> 0:11:13.200 A story on a topic that may make your make 0:11:13.240 --> 0:11:16.080 you roll your eyes a little bit or possibly glaze over, 0:11:16.080 --> 0:11:18.400 But it's something that always seems to indicate another crisis 0:11:18.440 --> 0:11:21.040 moment in Washington, until it doesn't, and then until it 0:11:21.080 --> 0:11:23.640 rears its ugly head again. It's about the debt ceiling. 0:11:23.679 --> 0:11:26.240 So let's get more from Bloomberg News Head of US 0:11:26.320 --> 0:11:28.680 Rates and f X Benjamin Purvis. He is here in 0:11:28.720 --> 0:11:31.199 our interactive broker studio in New York City along with 0:11:31.200 --> 0:11:34.160 Bloomberg Business Week editor Joe Weber on the remote access 0:11:34.160 --> 0:11:36.840 in Massachusetts. Is it fair to say, like your eyes 0:11:36.880 --> 0:11:39.160 glaze over, or you shake your head, you roll your head, 0:11:39.200 --> 0:11:40.640 You're like, okay, it's a story that's going to pass 0:11:40.640 --> 0:11:41.960 and then all of a sudden it shows up again, 0:11:42.040 --> 0:11:45.839 Joel uh and I was like, wait, what, it's back? 0:11:46.080 --> 0:11:48.280 And of course it is, um And it's been a 0:11:48.320 --> 0:11:51.400 little bit since we we've had to play this game 0:11:51.400 --> 0:11:56.240 of chicken, but it is, it is back, and you 0:11:56.280 --> 0:12:00.240 know it will have repercussions and been our How are 0:12:00.280 --> 0:12:03.400 those starting to already show up? What? What has investors 0:12:03.400 --> 0:12:07.000 and traders um freaking out? I I think you know, 0:12:07.240 --> 0:12:10.040 investors are sick of this thing, to be honest, I 0:12:10.040 --> 0:12:12.360 mean you know, I think you make the point that 0:12:12.400 --> 0:12:14.600 you know it comes up got your eyes glaze over. 0:12:14.640 --> 0:12:17.280 But it is important. Is at once ridiculous and and 0:12:17.480 --> 0:12:20.680 u afterally important. Um, it's ridiculous in the sense that 0:12:21.440 --> 0:12:25.079 you know, these folks are voting on increasing a limit 0:12:25.120 --> 0:12:28.480 for debt that they've already you know, increased the spending 0:12:28.480 --> 0:12:30.920 bills for so they've already approved the spending. Yet now 0:12:30.960 --> 0:12:33.120 we have to go out and improve the debt to 0:12:32.960 --> 0:12:36.120 to to finance it. But at the same time, you know, 0:12:36.240 --> 0:12:38.280 this is having real world impacts, and this is part 0:12:38.280 --> 0:12:40.640 of what we were we've been writing about recently, is 0:12:40.640 --> 0:12:43.080 the real world impacts on on borrowing costs, The real 0:12:43.080 --> 0:12:46.120 world impacts on distorting things just because of some of 0:12:46.160 --> 0:12:48.800 the ins and outs and the arcane rules surrounding it. 0:12:49.520 --> 0:12:54.480 So what is this thing we call debt ceiling because 0:12:54.600 --> 0:12:57.840 we throw it around and assume everybody knows what we're 0:12:57.840 --> 0:13:02.240 talking about, But I mean, what is it really? I mean, essentially, 0:13:02.240 --> 0:13:05.440 it's the it's the amount the credit card limit, if 0:13:05.440 --> 0:13:09.320 you will, of the US government, And you know, the 0:13:09.360 --> 0:13:13.320 Congress sets what it allows the government to borrow and 0:13:13.360 --> 0:13:17.880 then periodically has to raise that limit because America's debt 0:13:17.880 --> 0:13:19.920 pile is is not getting any smaller. It's you know, 0:13:20.360 --> 0:13:23.480 ballooned and ballooned even more in this sort of post 0:13:23.480 --> 0:13:26.640 COVID crisis to around twenty eight trillion, So you know, 0:13:26.760 --> 0:13:30.240 this isn't getting any smaller. And the spending bills that 0:13:30.280 --> 0:13:35.480 allow this, that that require this spending, this borrowing, you know, 0:13:35.520 --> 0:13:37.959 they've already been passed. This has already happened. So it's 0:13:38.040 --> 0:13:39.920 literally just saying I'm going to agree to pay off 0:13:39.960 --> 0:13:41.920 the credit card bill for all this stuff that I 0:13:41.960 --> 0:13:46.000 bought from Macy's or whatever. Um. And I could get 0:13:46.040 --> 0:13:50.160 a lot of stuff at Macy's, could buy Macs, you 0:13:50.280 --> 0:13:55.320 probably could a few times over. But I mean, you know, 0:13:56.120 --> 0:13:57.720 as part of all of this, you know, we end 0:13:57.760 --> 0:14:00.880 up with a partisan wrangle each time, and it's something 0:14:00.920 --> 0:14:03.559 that happens under administrations of both parties. You know, it 0:14:03.600 --> 0:14:06.199 happened under Barack Obama, it happened under Donald Trump, It's 0:14:06.200 --> 0:14:09.600 happening again under Joe Biden. And one party holds the 0:14:09.640 --> 0:14:13.200 other too, you know, to account. They like to describe it, 0:14:13.240 --> 0:14:15.720 but it's really just holding them hostage to what is fundamentally, 0:14:16.280 --> 0:14:19.840 you know, a superfluous thing because we know they're going 0:14:19.880 --> 0:14:23.040 to find the money. Correct, Is that a stupid assumption? 0:14:23.240 --> 0:14:26.720 Or know everyone everyone bet you know, everyone is essentially 0:14:26.800 --> 0:14:28.800 betting on the fact that you know, somehow or another, 0:14:29.240 --> 0:14:30.800 you know, they'll come up with a with a fix 0:14:30.800 --> 0:14:32.960 on it. And and that's one of the other ludicrous 0:14:33.000 --> 0:14:35.840 elements of this is that, you know, the debt limit 0:14:35.880 --> 0:14:38.520 is now back in place. It came back in place 0:14:38.560 --> 0:14:40.960 at the beginning of this month. Yet America is continuing 0:14:40.960 --> 0:14:43.920 to borrow because they've got so called extraordinary measures, which 0:14:43.960 --> 0:14:47.240 allows them to wangle a few things here to a 0:14:47.240 --> 0:14:50.680 few nips and tucks there, do a few accounting maneuvers 0:14:50.680 --> 0:14:53.800 somewhere else. And all of this has an impact. Um. 0:14:53.840 --> 0:14:57.040 You know, it's sort of underscores how ludicrous it is. Um. On. 0:14:57.120 --> 0:14:59.680 One element that really underscores that we we we talk 0:14:59.720 --> 0:15:01.840 about is this idea that you know, as part of 0:15:01.880 --> 0:15:03.360 the whole mechanics of it, they have to get the 0:15:03.360 --> 0:15:07.200 pile of cash that America has down. Um. The essential 0:15:07.200 --> 0:15:09.280 reason being this is to stop them going out and say, 0:15:09.400 --> 0:15:12.360 issuing five trillion dollars worth of debt just before the 0:15:12.920 --> 0:15:16.160 ceiling comes into place, and then just using that to 0:15:16.240 --> 0:15:18.440 pay their bills at their leisure without having to do it. 0:15:19.280 --> 0:15:21.440 This time around, everyone was talking about, oh, we have 0:15:21.440 --> 0:15:22.880 to get the cash pile down. We have to get 0:15:22.920 --> 0:15:26.040 it down to about a hundred and thirty billion dollars, 0:15:26.120 --> 0:15:28.280 which isn't chicken feed, but is not a huge amount 0:15:28.600 --> 0:15:31.040 in the grand scheme of things for Uncle Sam and 0:15:31.080 --> 0:15:33.880 then lo and behold. At some point in that process 0:15:33.880 --> 0:15:39.520 the Treasury says, actually that ms alright, for those of 0:15:39.520 --> 0:15:41.720 you whose eyes are glazing over, stay with us, right chel. 0:15:42.880 --> 0:15:45.880 Not only that, because I think this is the other 0:15:45.960 --> 0:15:48.480 element that comes into play here is that there's an anniversary. 0:15:49.280 --> 0:15:55.040 This is ten years ago that the US actually uh 0:15:55.120 --> 0:15:58.720 you know, went through this whole song and dance and 0:15:59.280 --> 0:16:02.720 snpeak with a decision that stripped the US of its 0:16:02.760 --> 0:16:06.360 triple A creator credit rating, which been would have been 0:16:06.400 --> 0:16:09.160 the repercussions of that decision ever since and what kind 0:16:09.160 --> 0:16:12.640 of bearing might that have on on the conversations this 0:16:12.640 --> 0:16:16.240 time around? Well, I mean the cynics would say that, 0:16:16.480 --> 0:16:19.960 you know, America has only gone from you know, strength 0:16:20.000 --> 0:16:21.640 to strength in terms of what it can borrow and 0:16:21.680 --> 0:16:23.560 how it's being able to borrow since then. The debt 0:16:23.600 --> 0:16:27.120 pile is you know, exploded since then. Interest rates have 0:16:27.120 --> 0:16:30.240 actually been lower since then, So in real world terms, 0:16:30.640 --> 0:16:34.160 it hasn't affected the ability of the borrower to borrow. 0:16:34.600 --> 0:16:38.120 But you know, it did cause some major eructions within markets. 0:16:38.120 --> 0:16:41.160 It caused some major troubles and and you know it 0:16:41.360 --> 0:16:45.880 under underscores how fragile, you know, some of these things are, 0:16:45.920 --> 0:16:48.200 and that this isn't really a plaything that that Washington 0:16:48.240 --> 0:16:51.400 folks should be you know, messing around with for partisan politics. 0:16:51.600 --> 0:16:55.920 Because you're write about that to get the cash balanced down, correct, 0:16:56.280 --> 0:17:00.640 that the Treasury does affect markets because it's not borrowing 0:17:00.680 --> 0:17:03.800 as many t bells. So this you know, supplied tom 0:17:04.000 --> 0:17:06.720 Right things happen. Yeah, I mean, it's it's you know, 0:17:06.840 --> 0:17:09.520 it's one of it's the biggest, baddest debt market on 0:17:09.520 --> 0:17:12.840 the planet. It you know, dictates the cost of every 0:17:12.960 --> 0:17:15.719 you know, of everything that sort of people overlay over it. 0:17:16.240 --> 0:17:20.040 And you know, even minor changes that affect the interest 0:17:20.119 --> 0:17:21.960 rates on say you're a three month bill or a 0:17:21.960 --> 0:17:25.200 six month bill can have repercussions down the line. And 0:17:25.520 --> 0:17:28.120 you know, the Treasury deciding to issue half as much 0:17:28.119 --> 0:17:30.520 as it did that will have a major impact on 0:17:30.520 --> 0:17:35.240 the costs. So when we think about how this could 0:17:35.320 --> 0:17:39.400 come to ahead, what are you going to be watching, Ben, Well, Unfortunately, 0:17:39.440 --> 0:17:41.480 it's that good old waiting game of of looking at 0:17:42.359 --> 0:17:45.200 what Mitch mcconnald's doing, what Chuck Schumer's doing, and all 0:17:45.200 --> 0:17:48.359 the all the usual suspects in Washington. Um. You know, 0:17:48.440 --> 0:17:51.680 we've just seen today, um the latest in the wrangling 0:17:51.800 --> 0:17:56.640 over over this UM topic. And obviously it's it's being 0:17:56.680 --> 0:18:00.320 interspersed with wrangling over other spending type priorities, over the 0:18:00.359 --> 0:18:03.600 infrastructure bill we've got in Washington, over the broader spending 0:18:03.600 --> 0:18:06.800 agenda the Biden administrations looking to pursue, and these are 0:18:06.840 --> 0:18:09.320 all being counterbalanced as part of some you know, we 0:18:09.359 --> 0:18:11.000 would like to say it's some big chess game, but 0:18:11.600 --> 0:18:15.000 maybe it's not so so well thought out. I love 0:18:15.000 --> 0:18:16.560 how you end that. It's not to say that debt 0:18:16.560 --> 0:18:18.000 and deaf as it's don't matter. But the way the 0:18:18.080 --> 0:18:20.480 u S thinks and legislates on the topic needs to change. 0:18:20.480 --> 0:18:22.040 And I think most of us have been following this, 0:18:22.280 --> 0:18:24.800 or like you, who have been watching this over and 0:18:24.840 --> 0:18:28.240 over again, things need to change. Say all right, Benjamin, 0:18:28.240 --> 0:18:30.840 purpose thank you so much. It's an important story to 0:18:31.000 --> 0:18:35.119 understand what keeps coming round and round when it comes 0:18:35.119 --> 0:18:38.119 to government negotiations on spending and how to pay for it. 0:18:38.560 --> 0:18:41.080 Benjamin of course, Benna's head of US Rates and f 0:18:41.200 --> 0:18:43.479 X at Bloomberg News, and of course Joe Weber, our 0:18:43.560 --> 0:18:46.200 editor of Bloomberg Business Week, fun at online at Bloomberg 0:18:46.240 --> 0:18:54.480 dot com. This is Bloomberg Business Week with Carol Masser 0:18:54.720 --> 0:18:59.639 and Bloomberg Quick Takes Tim Stinovik on Bloomberg Radio. You 0:18:59.640 --> 0:19:01.960 are on a seed to Bloomberg Business Sweek on Bloomberg 0:19:02.000 --> 0:19:04.720 Radiom Carol Master, Tim Stanovic is off Bloomberg Business Week 0:19:04.720 --> 0:19:07.640 brought to by s c I. Today's competitive marketplace requires 0:19:07.640 --> 0:19:10.600 asset managers to become more operationally a deep see how 0:19:10.640 --> 0:19:13.920 you can transform your business with SEIS Global Platform at 0:19:14.000 --> 0:19:17.160 se i C dot com slash. I m s, Well, 0:19:17.240 --> 0:19:19.840 it's been chronic the flow of headlines out of China, 0:19:19.840 --> 0:19:22.720 in particular crackdowns on the country's big tech companies and more. 0:19:22.760 --> 0:19:25.840 But what's really going on here? Well, let's find out, 0:19:25.880 --> 0:19:28.000 and he writes about it in his weekly column Bloomberg 0:19:28.000 --> 0:19:31.280 New Economy Editorial Director Andy Brown. He notes that there 0:19:31.359 --> 0:19:33.560 is something much bigger going on. He joins us in 0:19:33.560 --> 0:19:36.400 our Bloomberg Interactive Broker studio. So you and I've talked 0:19:36.400 --> 0:19:38.080 a lot about the headlines, and I feel like they 0:19:38.080 --> 0:19:42.800 are fast and furious, NonStop, um, very thoughtful column. And 0:19:42.840 --> 0:19:44.480 you look at it in a different way. What's what 0:19:44.560 --> 0:19:47.159 do you see is really going on here? So the 0:19:47.280 --> 0:19:51.920 question everybody wants the answer to is why on arth 0:19:52.119 --> 0:19:58.040 a Chinese authorities going after the most dynamic, the most 0:19:58.119 --> 0:20:00.879 profitable part of their comm me, which of course is 0:20:00.920 --> 0:20:05.840 the tech sector and particularly consumer tech at a crackdown 0:20:05.960 --> 0:20:09.919 by the way that has cost listed Chinese companies in 0:20:10.080 --> 0:20:15.399 excess of one trillion dollars. And I happen to think 0:20:15.480 --> 0:20:20.119 that the most popular explanation for this is also the 0:20:20.280 --> 0:20:25.400 most unlikely. And the explanation everybody is coming up with 0:20:25.640 --> 0:20:28.199 is this is this is sort of benign. This is 0:20:28.240 --> 0:20:32.719 President Shi jim paying looking at rising prices in China 0:20:32.880 --> 0:20:38.080 and saying this is exacerbating inequality and we have to 0:20:38.119 --> 0:20:43.639 do something about it, and that will that involves cracking 0:20:43.680 --> 0:20:48.639 down on tech companies who are allegedly building monopolies and 0:20:48.840 --> 0:20:53.439 underpaying their gig workers and abusing consumer data and so on. 0:20:53.480 --> 0:20:56.119 And so I haven't to think this is a fig 0:20:56.200 --> 0:21:01.879 leaf that actually this is all about a monumental struggle 0:21:02.280 --> 0:21:06.600 for power and control in China. And the giveaway, the 0:21:06.800 --> 0:21:09.960 giveaway here is the fact that the sharp end of 0:21:09.960 --> 0:21:13.359 this crackdown and you're seeing it now, particularly last week, 0:21:13.720 --> 0:21:17.280 is led by ideologues in the party and including in 0:21:17.600 --> 0:21:22.600 the propaganda agencies, which really are core to power in China. Well, right, 0:21:22.680 --> 0:21:25.040 and that I mean if you think about impacting people 0:21:25.160 --> 0:21:27.359 right in terms of how they're thinking about it. So 0:21:27.359 --> 0:21:30.520 so you're basically saying, Andy, the Chinese government's all that 0:21:30.680 --> 0:21:33.960 worried about losing its power of controlling its people. Is 0:21:33.960 --> 0:21:37.000